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# Re: st: Reverse Causation Solutions?

 From njcoxstata@gmail.com To "statalist@hsphsun2.harvard.edu" Subject Re: st: Reverse Causation Solutions? Date Thu, 20 Jun 2013 18:19:42 +0100

```No. Statalist is about Stata and statistics.

Nick
njcoxstata@gmail.com

On 20 Jun 2013, at 17:23, Vũ Võ <hoangvu@ueh.edu.vn> wrote:

> This is not a Stata question. Is it raised in a wrong forum?
>
> Rgds,
>
> Vu
>
> On 20 June 2013 18:18, Mai Anh Ngo <maianh.ngo@gmail.com> wrote:
>> I have a problem of reverse causation in my regression model for a
>> panel data set with unobserved heterogeneity. My regression equation
>> is as follows:
>>
>> Y1it = a + b*Y2it + c*Xit + ui + eit
>>
>> where Y1it and Y2it are binary and it is suspected that there is
>> possibly reverse causation from Y2it to Y1it or from Y2i,t-1 to Y1it
>>
>> I could not find a good instrument to use the instrumental variable
>> method and I am thinking of estimating a bivariate model:
>>
>> Y1it = a + b*Y2it + c*Xit + ui + eit
>>
>> Y2it= d +e*Y1it  +  f*Zit + vi +  rit
>>
>> where the error term eit and rit are allowed to be correlated.
>> However, I was told that in general, a bivariate model would not solve
>> reverse causation/simultaneity problem. Is that true?
>>
>> What are the methods that can be used to solve reverse causation or
>> simultaneity problem?  Thank you for your consideration.
>>

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